Gulf stock markets fell sharply in early trade on Thursday after Saudi Arabia and its allies in the region launched air strikes in Yemen, escalating the military conflict there.
Dubai’s index, which is the most volatile in the region because of leverage and the dominance of short-term investors, tumbled 5.1 per cent to 3,262 points in a broad sell-off. It dropped below technical support at the January low of 3,358 points, leaving no chart support before the December low of 2,993 points.
Abu Dhabi dropped 2.2 per cent. Kuwait’s benchmark was down 1.7 per cent, while Oman slipped 0.2 per cent.
Warplanes attacked the Yemeni capital Sanaa’s airport and its al Dulaimi military airbase on Thursday after the Houthi militia and its army allies advanced towards the city of Aden a day earlier.
Yemen’s slide toward civil war has made the country a front in mostly Sunni Saudi Arabia’s rivalry with Shi’ite Iran, which Riyadh accuses of stirring up sectarian strife throughout the region and in Yemen with its support for the Houthi militia.
The crisis now risks spiraling into a proxy war with Shi’ite Iran backing the Houthis, and Saudi Arabia and the other regional Sunni Muslim monarchies supporting Yemeni President Abd-Rabbu Mansour Hadi. Egypt is providing political and military support for the Saudi-led operation.
Saudi Arabia’s main index tumbled 5.0 per cent on Wednesday amid reports that the kingdom was amassing troops and military equipment on its border with Yemen. The kingdom’s market opens later in the day, at 0800 GMT.